On Friday, President Trump hit the French right in their national pride after the French government implemented a 3% tax on U.S. tech companies like Amazon, Facebook and Google — he said he would tax French wine.
Trump tweeted, “France just put a digital tax on our great American technology companies. If anybody taxes them, it should be their home Country, the USA. We will announce a substantial reciprocal action on Macron’s foolishness shortly. I’ve always said American wine is better than French wine!” Later in the day, Trump told reporters he was considering putting a tariff on French wines, asserting, “I might. France has put tariff on American companies. I might. Wrong thing to do. They should not do that.”
On Wednesday, French President Emmanuel Macron signed the 3% tax into law. It had been approved by the French Senate on July 11. On July 10, Trump ordered an investigation into the tax. That same day, U.S. Trade Representative Robert Lighthizer issued a statement asserting that the U.S. would examine whether the French tax “is discriminatory or unreasonable and burdens or restricts United States commerce.”
After the Trump administration warned France weeks ago not to implement the tax on American tech companies, French finance minister Bruno Le Maire stated, “France is a sovereign nation that decides its own tax rules. And this will continue to be the case.”
Trump added, “I’ve always liked American wines better than French wines, even though I don’t drink wine. I just like the way they look. We tax our companies. They don’t tax our companies. I told them don’t do it because I’ll tax your wine. So, yeah, we’re working on that right now.’
White House spokesman Judd Deere echoed:
The United States is extremely disappointed by France’s decision to adopt a digital services tax at the expense of U.S. companies and workers. France’s unilateral measure appears to target innovative U.S. technology firms that provide services in distinct sectors of the economy. ‘The Trump Administration has consistently stated that it will not sit idly by and tolerate discrimination against U.S.-based firms. The U.S. Trade Representative has already launched a Section 301 investigation into France’s digital services tax, and the Administration is looking closely at all other policy tools.
The Trump Winery near Charlottesville, Virginia makes 36,000 cases of wine per year.
On Wednesday, Amazon.com tweeted, ‘We applaud the Trump Administration for taking decisive action against France and for signaling to all of America’s trading partners that the U.S. government will not acquiesce to tax and trade policies that discriminate against American businesses.”
Reuters noted, “Earlier this month, the United States threatened tariffs on another $4 billion worth of additional European Union goods, including wine, cheese and whiskey – that could be hit with tariffs as part of a nearly 15-year dispute at the World Trade Organization over aircraft subsidies given to U.S. planemaker Boeing Co and its European rival, Airbus SE.” Reuters added, “Other EU countries, including Austria, Britain, Spain and Italy, have also announced plans for their own digital taxes.”